Atria’s
Interim Report Q3/2013 tells on page 6 that the primary production in Russia has been unprofitable. But most importantly, the
statement implicitly suggests that the Moscow
unit has no longer been
unprofitable. Still, also it will be now abandoned.
Atria Russia will discontinue
its unprofitable primary pork production in Russia. Furthermore, the industrial
production and logistics unit located in Moscow will be discontinued by the end
of 2014.
Anyway,
Atria Russia is now the same as Pit Product and practically the same as the
Gorelovo plant and logistic center. Plant’s
capacity utilization rate
is about 60 to 70 percent. Currently Atria Russia’s yearly revenues is about
€125 million, which means a crude and naïve forecast of about €200 million in
the coming years at most. This in turn
means yearly EBIT about €10 million at most. Hype
is over.
In
St. Petersburg Atria’s market share has long been about 25 percent. It cannot become much larger. Atria’s convenience food launch is of course
a good way to increase sales also in Moscow. But there is one way more. Namely Atria Russia has recently and repeatedly told that, in addition to hypermarkets, it has found a clientele of small retail
shops in St. Petersburg. This photo
on a fresh news page suggests that the
company has some suitable means
of transportation. Small is beautiful also in Russia? Hopefully yes.
There
is still one thing that leads to ask
whether small will be beautiful. This thing is Sibylla
fast food chain. It operates in ten European countries, Sweden, Finland,
Poland, Czech Republic, Slovakia, Hungary, Estonia, Latvia, Lithuania and
Russia. Outside Sweden, Sibylla outlets are
not only small but mostly tiny and therefore their product range is fairly narrow. However, the chain keeps growing and
currently the number of outlets in Russia is not far from 1000. They are located at gas stations, sports
arenas, concert halls, universities for example. Here’s a map. It in fact misses the newest ones in Omsk and
Novosibirsk, that’s Southern Siberia. And here is a fan of the KHL team HC Ugra from the city of
Khanty-Mansiysk. There is going on one of Sibylla Russia’s latest
promotions. Sibylla’s slogan in
Russia seems to be “Tasty and Healthy”.
One may doubt its brilliance for fast food generally and for average sports
fans specifically.
All in
all, many believe that Atria Russia is on its way to profits. However, the
money can be wasted in so many ways and almost record weak ruble surely hurts
pork import and diminishes profits anyway.
Nevertheless, Jarmo Lindholm, EVP Atria Russia, is exceedingly positive. He has
said recently in a broad interview that by 2015 Atria Russia will be the most
profitable part of the whole Group. One
must hope, that it means prosperity in Russia rather than ruin in other
business areas.
We will look at Atria later but on Thursday, December 5th, we are going to look
at HKScan’s businesses. Soften your downfall -
be small.
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Artoparto and here is my Disclaimer.
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